I have some news for the Baby Boomers; you didn't contribute enough to medicare and SS to get the benefits you have been promised. Below is a chart of the net-lifetime benefits from Medicare by income. As you see, even people making $95,000 don't pay in as much as they take out of Medicare.

A much bigger disparity in taxes versus benefits occurs for couples. In the case of a household with only one wage earner, the taxes paid out were $345,000, but the benefits received by both parties will be $778,000. For two-earner couples where one earned the average wage and the other earned a low wage ($19,400), tax payout was $500,000, but benefits will be $800,000.

The numbers vary but everyone agrees that when a Baby Boomer whines that they "paid in to the system their whole lives" the honest response is "Yes, but not hardly enough to balance the benefits promised".

My generation, Generation X born between 1965 and 1982, followed the Baby Boomers. My generation is 1/2 of the size of the Baby Boom. In the 80's, actuaries knew this and started then working on how to shore up SS for the coming demographic disaster. In 1983 major changes were made to SS to avoid the inevitable disaster, but the funds that were supposed to be set aside were spent. There is no SS trust fund so funding SS comes from yearly revenues. SS currently takes in less than it spends and will most likely continue to do so for the rest of my life.

So, we have what any student of government could have predicted, Yet another government program that has failed to do what it promised to do. If SS were run by a private company, your premiums would have gone up and the Trust Fund would not only exist, it would be earning interest and funding investments.

I have a few points to make:

1. It's time to tell the truth about entitlements. The government fucked up and you aren't going to get what you were promised. The sooner we admit that, the better off we'll all be. Means testing and reduced benefits are inevitable.

No age group has ever paid in sufficiently for what they have pulled out of the "Ponzie Scheme: The Sequel," otherwise know as Medicare. The government just had a big enough workforce duped into paying for the early recipients--just like Social Security, the original PS.

The funds could not be invested because the government is not allowed to do that (except "investing" in education, health care, and other spending programs.) It could not be set aside after 1972, when Nixon took the US off the gold standard. And even then, it would have bothered Congress to know that pile of gold was sitting there unused.

...written by Algore not Sequel , July 28, 2011

What about my damn lockbox!

The LME and I discussed this last nightwritten by Barthélemy Barbancourt , July 28, 2011

She objects as she has paid in her whole life. My point is that right or wrong the program is broken and not likely to be fixed to anyone's satisfaction any time soon. The money is gone and any attempts to increase taxes will result in lower growth and lower tax receipts. Even 4 or 5% growth won't fix this issue.

The sooner we start getting people to admit this, the better off we are.

sorrywritten by Elmer , July 28, 2011

I really wish I had been given another choice when I first started contributing in 1963. It was clear to me even as a teenager that it was a doomed program. But I obeyed all the rules. I also got a plan that turned into a 401k in the late 70s, and in which I hold all the money myself (after taxes). The 401 is worth a lot more than the SS.

So what to do? If we cut off all us old folks, maybe 80 to 90% will have to go on general assistance. So it's the old "pay me now or pay me later" problem. I wouldn't have to go on welfare, but would have to cut back (and stimulate unemployment).

Here's my pessimistic prediction: means testing according to net worth. This would entail taxing investments (some of which were taxed already) and taxing them before a profit is realized, which is disgustingly immoral, but a socialist's dream come true. Bye bye Roth plans, too. This would also accomplish the goal of reducing SS to a simple welfare program... at least being honest about it. It would probably spawn a sudden increase in $10000 gifts to children and grandchildren with the understanding that the family would feed back harder-to-trace support to the old folks, and also huge paid-up life insurance policies with the kids as beneficiaries.

Damned depressing.

You've got itwritten by Barthélemy Barbancourt , July 28, 2011

Means testing is a given, there is no way around that. Old people usually have a high net worth and a low yearly income so there would be a ton of asset movement. The SS section is the simplest to fix, even if the fix is crappy.

Medicare is going to be tough as it means rationing care and making some really, really hard decisions. There are tons of market reforms that would help, but in the end there isn't enough $$ to give every Baby Boomer every medical procedure that they could ever want.

I'll give you even more to think about, do you really think that recent immigrants and 20 somethings will vote for 50% tax rates to support the elderly? Especially when these voters realize that the Baby Boomers are the same ass-nozzles that left them with $20 trillion in debt?

The Boom was seduced by liberalism and they are the generation that should bear the brunt of their own stupidity. I still wonder how the Greatest Generation gave birth to the most selfish generation that has ever existed on the face of the Earth?

As a member of the generation cursed with following these asshole, I'd like to say thanks for nothing. The world will be a better place when the majority of the Boomers have toddled off into oblivion. Yes, my mom is a Boomer, but in general that Baby Boomers have really fucked up our country.

don't shoot!written by Elmer , July 28, 2011

I'm a year older than the Boomer demographic group, so I guess I won't be walking into the Katyn Forest with you and your gun. Geez, settle down, man.

CNN Business says the median net worth of a 65+ year old is $232000. Assuming a modest withdrawal rate of 4-5% means an annual income of $10k from net-worth investments. Assume that there is another $20k from Social Security (about average from ssa.gov), and that's $30k. That's an average/median kind of income situation for current benefit recipients; it won't grow much for Boomers with the current stagnant economy and Boomers facing wilting stock and bond markets. And people earning that kind of money before retirement don't pay income tax at all, really. So taxing net worth suddenly forces what amounts to a property tax on a group that wouldn't pay it as income tax if they were still working? Seems fair (sarcasm). Also, even a 30% reduction in payments will not solve the SS ponzi problem, and will only serve to bring people into general welfare assistance (after selling their homes, which are not included in net worth, but could be taxed into oblivion). Oh, yeah, and it's politically impossible, I bet even to Tea Partiers.

At leats you get it.written by Barthélemy Barbancourt , July 28, 2011

Your generation should do OK on SS and Medicare, no major changes until you're probably toast.

My point is that the Boomers will bitch the loudest and get hit the hardest and this is fine and well by me as payback is a bitch but by the time they are done, the system will be well and truly fucked and my generation will be left with the mess, as usual.

The Baby Boomer mantra: We get to have all the fun and then outlaw everything we did because we couldn't control ourselves.

You're just living too damn long.written by Jonny Texas , July 28, 2011

Means testing is a load of shit because the second you devise the rules there will be exceptions you can drive a truck through and the assets will just get placed in the exempt portions of the recipient's net worth. POOF everyone over the "retirement" age will magically become poor enough to receive benefits. You need a way to control the system that cannot be gamed.

SS was meant to hold people over for the last years of their life when they COULDN'T work and were waiting to die, not as a retirement income scheme. The "retirement age" needs to be raised not 1, but at least 5 years and needs to be increased with life expectancy. Everything else is political patronage.

...written by Nobody , July 28, 2011

Boomer here! I fully expect PBO to pull an Argentina and simply take all the 401 K plans. My home is within a few years of being paid for so I'll be OK. Oh for us married guys, after years of buying the occasional gold trinket for the wife, get it all appraised. I had mine done and it floored me. And I bought a safe and an insurance rider.

Did that years backwritten by Barthélemy Barbancourt , July 28, 2011

A few B-days with a Zero and a custom made wedding set were all the convincing I needed.

Few things would really set the country to arms, taking 401(k)'s would definitely be one of them.

If PBO wants to see violent revolt, just try to take everyone retirement savings.

...written by Woody , July 28, 2011

PBO will never start taking 401K's. That's just crazy talk. I Like the idea of extending the retirement age to 67 or 69.

Woodheadwritten by Nobody , July 28, 2011

It's been done elsewhere. It would spark a revolt. Raise the age to 70. If I was young I'd be stashing money at a high rate.

Bartwritten by Nobody , July 28, 2011

With gold trading 300% higher than just 5 years ago... I've got a "Guy" that will give you a lump sum bid and do it at your house.

Nowhere manwritten by Woody , July 28, 2011

I agree it would spark a revolt; that's why it won't happen. 401K's are untouchable. I'm glad I stashed at a high rate when I was younger.

...written by TomC , July 28, 2011

the answer is the FairTax. The answer is always the FairTax. Do not punish someone for doing the right thing--earning income or investing. As unrealistic as it may be to think about implementing it, it would address many of the problems.

People who spend more, those who can afford it, pay significantly more in tax. Currently, there is no reasonable or fair way to tax wealth. The FairTax taxes the spending or liquidation of that wealth. It encourages massive investment, bringing the estimated $14T of offshore money back here, which would make the economy explode with opportunity.

...written by TomC , July 28, 2011

I also think Ryan's (and formerly Clinton's) voucher plan for Medicare is the right way to go. It builds in means testing.

I agree some sort of comsumption tax is inevitablewritten by Barthélemy Barbancourt , July 28, 2011

The problem with a national sales tax is that it forces states without a sales tax to collect a sales tax.

...written by Jonny Texas , July 28, 2011

and......

That is not really a problem as it is an established system that retailers are familiar with and virtually every accounting and sales registering system has the capacity built in so there is no substantial capital investment required. It would be fairly easy to implement. Very gentile learning curve.

There are plenty of other problems to site, I fail to see how this is one of them though.

...written by TomC , July 29, 2011

I don't like the idea of "some sort of consumption tax" being inevitable. The screams VAT, which I think is absolutely the wrong way to go. A complete replacement of all federal payroll taxes with the embedded FairTax--as designed is the way to go. Any squishy look-a-like will not likely do the job. And anything less than an elimination and constitutionally outlawing of all income based taxes would be unacceptable.

...written by Jonny Texas , July 29, 2011

"anything less than an elimination and constitutionally outlawing of all income based taxes would be unacceptable."

Are you talking about this if the FairTax was enacted?

Why not a flat tax with household per capita income exemption? Unlike the FairTax this has actually made it past the theoretical phase.

The whole Prebate thing from the FairTax gives me the willies.

...written by Nobody , July 29, 2011

Flat tax me. even Russia has a better tax than we do it's a flat consumption tax of 18%. No income, no VAT, no wealth tax.

The libs hate the falt tax,written by Barthélemy Barbancourt , July 29, 2011

and so do some Republicans. If the tax code is simplified, politicians can't hand out goodies to lobbyists.

...written by TomC , July 29, 2011

The advantages of the FairTax are many, but elimination of the IRS and taking power away from the federal government is primary.

Short of that, I would endorse a flat tax. One that completely replaces the income & FICA taxes, so it may be more than the 18%. That would remove the hand-waving that is built in to the "employer contribution" portion of the current FICA system. Force me to see the income tax and the full FICA amount that the feds get. It all goes into one pot in Washington, why not one line on the paycheck? So 18% becomes 33.5% (34.5% with Obamacare) when it's all on the line.

...written by Jonny Texas , July 29, 2011

Exactly Bart, and that is why i believe that it will never happen. Politicians have no problem giving up responsibility (ballot initiatives, power to declare war, etc.). However if you ask them to give up power you are in for a fight.

...written by Nobody , July 29, 2011

The IRS tax code has become so complex that it is more like the Italian system, ie arbitrary. "say Guido, I heard you had a good year!" "No not me, my kids ribs are showing!"

It all comes down to who has the best lobby in DC.

Can someone provide some answers?written by Jonny Texas , July 29, 2011

One of the draws of the FairTax is the availability of capital as investing and earning are not taxed.

I can think of a few problems though:

How does it deal with the fact that companies are not going to want to make capital investments (now 28% more expensive) especially if they can substitute the investment with labor (driving the unskilled and semi-skilled towards union membership to protect gains). This would reduce worker efficiency (Once of the few ace cards the the US enjoys).

It would be a huge windfall for current rental property owners as it would be making every property instantly 28% more expensive. It would create significant barriers to new construction, expansion, or ownership.

It would instantaneously create a huge underground economy that would crush retailers as underground sellers would have a 28% margin to play with.

Inventory accounting would become a real bastard as anything counted as "waste, damaged, or unsellable" would have to be scrutinized.

This is just some of the issues a simple business undergrad can pull out of his ass. I am sure there are more.

...written by Nobody , July 29, 2011

My prob with the Fair Tax is that it was designed o be "revenue neutral". I can do without that.

Internet sales make the issue mootwritten by Barthélemy Barbancourt , August 01, 2011

Local retailers are lobbying hard for internet taxes, which will just push purchases further from the USA.

I also agree that 28% almost guarantees bootlegging and a black market. With the internet, this is easier than ever.

We need to rethink how we want to fund government. We should be asking which taxes are the least damaging to the economy and the easiest to collect. I suggest we start with an across the board 15% flat tax. Everyone pays and the rate is low enough to make the cost of avoidance not worth the effort for most people.

...written by TomC , August 02, 2011

Quickly, the costs of construction would not change dramatically for current costs since those embedded taxes are currently built into the products through payroll taxes, income taxes, etc.

FairTax is only added to new products, not resales.

There would be some underground economy, there always is. However, monitoring a few 10000 businesses is much more doable than monitoring and tracking millions of people.

The biggest advantage i see to the FairTax, and probably the number one reason it will not pass, is the power it takes away from the federal government. The federal government relies on and pays for the states to collect the taxes. Then it relies on the states to pass that money on to the feds.

...written by Jonny Texas , August 02, 2011

The cost of new construction would change massively as everything that was purchased for the construction would need to be taxed followed by a whopping 28% on the back end. If existing construction wasn't taxed it would enjoy a massive subsidy vs. new construction and you would never see another building built in America during your lifetime, or for that matter another car, boat, bicycle, or anything else that could be refurbished and resold (funny, I never saw you as the green type). Congratulations, you've turned us into Cuba.

A few 10,000 businesses? According to the "literature" you would have to monitor every business in America that sells a product or performs a service. You would have to monitor a few 100,000 businesses in Minnesota much less the country.

Some underground economy? Look at the bootleg cigarette industry in NYC. That industry grew out of a $5 product with $4.35 in taxes, what happens when you slap 28% on top of everything else for a $1K purchase. Employee theft will become an epidemic as inventory will be "wasted" or "lost" to be sold out of a trunk to avoid the 28% tax. The retailers loses the item, the retailer loses the sale, and the country loses the taxes.

Take the 15% flat tax out as withholding and send back a refund based on household size. Everybody is doing it already but the filing process would be easier and everybody would have a built-in financial incentive to do it.

THe biggest problem I see with the fair tax is that it retards economic activity. The only way to recover what is lost though gaming the system would be to raise the rate which would further incentivize gaming the system.

At least the flat tax is a system that has successfully operated in the real world.

Consumption taxes have to stay lowwritten by Barthélemy Barbancourt , August 02, 2011

The by their definition, retard consumption. We have been OK with them when the products are smokes and booze, but they really suck when it's milk and butter.

Fair taxwritten by sanders , August 02, 2011

Bart and JT, I think you're both missing the point on the FairTax.

JT, on the house thing, someone who is selling a 'used' house for $300K or so is the equivalent of someone selling a new house for the $300K. The tax is included. The guy selling the used house has ALREADY paid taxes on it. That's the embedded tax that the builder paid when the house was originally built. It's just that the taxes went to the Feds as payroll taxes, corporate taxes, etc.

Bart, what retards consumption is corporate taxes, and the fact that we only take home 60-70% of our salary (or in the case of self employed, what they have to pay in every quarter).

JT, you are correct about the number of businesses. There were some 32 Million businesses that filed returns, whether they were 1120s, Schedule C, or whatever. There were also 140 million individual tax returns filed. But you know what? The 32 Million businesses are ALREADY being monitored, audited, and paying taxes. With the FairTax the 140 Million individual returns go away! AND the 32 million have one form to file monthly with the amount of tax that they have collected, monitored by the States. How many states already collect a sales tax? This would be an extension of that.

If you can't tell, I am a proponent of the FairTax. Read up on it. It does make sense.

Flat taxwritten by sanders , August 02, 2011

Oh, and JT, I do see an advantage over our current system with the flat tax as you mention it. A flat 15% would be nice. You still wouldn't pick up the underground economy, and you'd still have the 140 Million individual returns, but it would be a step in the right direction.

...written by Jonny Texas , August 03, 2011

"someone who is selling a 'used' house for $300K or so is the equivalent of someone selling a new house for the $300K."

How the "New" house is actually going to be $384K.

"The guy selling the used house has ALREADY paid taxes on it."

Exactly the tax is a one time event and once the taxes are paid that value has been captured. everything that was in existence before the implementation date has that advantage built into it.

This will completely screw up the value judgements of the consumers. Anything new will have a 28% pricepoint hurdle that it will need to overcome over existing goods simply by being "new". The consumer is going to look long and hard for anything that already exists that can be refurbished or fixed before paying that 28% penalty.

What is this going to do to incremental improvements? If I come up with an idea that only improves on existing designs by 10% in terms of value (efficiency, price reduction, cool factor, etc.)I am not going to do anything with it because it is not economically feasible to pursue. I can buy a machine for my business that will provide a 15% ROI? Forget it, the math don't work.

"The 32 Million businesses are ALREADY being monitored, audited, and paying taxes." You are right they are and this would not increase. With fair tax however you are now going to have to complicate that auditing by including inventory controls to account for things that were simply written off before as there is a HUGE incentive to sell "waste" as merchandise.

Sanders since you seem to be the scholar on the subject let me ask you a few questions since you can probably answer the off the top of your head.

1. Are the taxes paid at only the retail level or is it also paid at the wholesale level? 2. Is there anything resembling a charity, non-profit, or a religion under fairtax? 3. Are all goods taxed or are there things labeled as necessities? (i.e. food under sales tax)

...written by Jonny Texas , August 03, 2011

If this is being pushed as a environmental plan to discourage consumption of "new" goods I can see the advantages. It will discourage the creation of new goods and incentivize the reuse of existing and the recycling of old. It will drive service industry labor into the black market.

The fair tax only works in the labwritten by Barthélemy Barbancourt , August 03, 2011

People talk about embedded taxes and taxes already paid but consumers will only see the 28% (or 32%) tax and work like hell to get around it.

It would never work in the real world.

The flat tax does work in the real world and has an added bonus of being fair. PA used to have a flat state tax. The tax return fit on a postcard, you took you federal AGI, multiplied by .045 and there was your tax bill. When doing your taxes takes about 1 minute, 90% of people pay it and move on. The psychological effect is huge, you don't think that more work would get you a smaller tax bill. You also know that you neighbor driving the BMW just paid the same rate you did to the state.

...written by TomC , August 03, 2011

The $300K house is going to be $300K, regardless of new or not. The resold $300K house already had the taxes built in to the costs of the materials. The new $300K house costs $300K, and include the embedded $69K of taxes.

Taxes are paid at the wholesale level. If used in an end product, then a refund or offset on the actual end product's tax is taken.

Nonprofits, government agencies, everyone pays the tax, just like everyone pays for the payroll taxes of an employee that gathers the goods for that organization to purchase now. The costs of that employee are currently embedded in products an the will still be.

All goods and services are taxed. There are embedded employee taxes in all those items now regardless of what they are or who purchases them. The difference is those taxes will no longer be hidden and unknown. Instead they will be clearly listed on your receipt. A $100 iten will state clearly, $77 for the item, $23 for the tax.

...written by sanders , August 04, 2011

That's right Tom.

If you buy that fancy new iWhatever for $200, $46 or so is embedded taxes now. It won't change under the FairTax, you'll just see it on your receipt, instead of not knowing that it's there. It'll still be $200, and the 10% value that you can add will still put it to $220 under either system.

Now, is someone who bought one for $200 under the old system all of a sudden going to sell it used as if they only paid $154 for it once the FairTax is implemented? "I'd like to get $100 for my used widget... Oops, FairTax, I can only get $77 for it."

...written by Jonny Texas , August 04, 2011

Alright maybe I don't quite get this. Lets use some simple scenarios. I am using simple math and nice round numbers to keep things easy for me.

Example 1 I make bread. I am paid $10 an hour. My take home for 40 hours a week is $300 dollars and $100 is withheld in tax. The bakery sells the loaves I make for $1 to a supermarket.

The day after the fairtax is implemented:

A. What is my hourly wage? B. What is my take home? C. What is the price of bread to the supermarket? D. Does the bakery collect tax from the supermarket? E. Does the bakery pay tax on the flower it buys? F. If a loaf falls on the floor when I pull it out of the oven how are adjustments made?

...written by Jonny Texas , August 04, 2011

Example #2

Tom said: "Taxes are paid at the wholesale level. If used in an end product, then a refund or offset on the actual end product's tax is taken."

I make widgets in my garage. I sell the widgets to a wholesaler for $10. The wholesaler sells them as is to the retailer for $20. The retailer sells them as is to the public for $30.

The day after the fairtax is implemented:

A. Do I collect tax from the wholesaler? B. Do I get a refund when the wholesaler sells it? C. Does the wholesaler collect it from the retailer? D. If I use a trucking company to transport to the wholesaler does the trucking company charge me the tax?

...written by Jonny Texas , August 04, 2011

One of the advantages of the fairtax is the elimination of the IRS. If the IRS is gone who is going to:

The FairTax is a single-rate, federal retail sales tax collected only once, at the final point of purchase of new goods and services for personal consumption. Used items are not taxed. Business-to-business purchases for the production of goods and services are not taxed. A rebate makes the effective rate progressive.

Since business purchases are not taxable, how does the FairTax keep individuals from pretending to have a business so they can buy things tax free?

The FairTax has several features that make it difficult and very risky for persons to have a scam business in order to purchase items tax free. First, in order for any person to purchase items tax free for business purposes, the business has to be a registered seller and possess a registered seller certificate issued by the state sales tax authority. Registered sellers are expected to file monthly or quarterly sales tax returns with the state (depending on sales volume). The certificate enables the business to purchase tax free from wholesale vendors, but the vendor must retain a copy of the registration certificate to justify not having collected tax on the sale. When a business purchases items for business use from a retail vendor, they have to pay the tax on the purchase and take a credit against the tax due on their monthly sales tax return. They must keep invoices/receipts to document what they purchased and the amount of the purchase. They might also make note of the purpose of the purchase on the invoice.

Also, as registered sellers, they are subject to the possibility of being audited by the state. During such an audit, they will have to produce the invoices for all the “business purchases” that they did not pay sales tax on and will have to be able to show that they were bona fide business expenses. If they cannot prove this, then they will have to pay the taxes that should have been paid when the items were purchased, plus interest and penalties. The probability of being audited will be much greater than it is under the current system with its over 140 million tax filers. Under the FairTax, there will be less than 20 million businesses that will be filing sales tax returns and thus subject to the possibility of being audited. Thus, the probability of tax cheats getting caught will be much greater than it is today, making tax evasion riskier than it is today. Additionally, while the FairTax has much stronger taxpayer rights than does the current tax system, the FairTax legislation provides for a number of fines and penalties for noncompliance. It also authorizes a mechanism for reporting tax cheats and obtaining a reward. An example would be 1-800-TAX-CHET.

Another potential scam would be to have a “fake” family business in order to buy things for family members tax free. The FairTax has a specific provision to prevent this. Although it does not prohibit businesses from providing taxable property or services as gifts, prizes, rewards, or as remuneration for employment, the gift, reward, etc. is considered to be the conversion of property or services from business use to personal use and is therefore taxable. Likewise, there is a similar provision to prevent abuse of employee discounts. Under the FairTax, employer-provided employee discounts over 20 percent are taxable. The term “employee discount” means an employer’s offer of taxable property or services for sale to its employees or their families for less than the offer of such taxable property or services to the general public. If the employee discount amount exceeds 20 percent of the price to the general public, then the sale of such taxable property or services by the employer to the employee is considered the conversion of property or services to personal use and is subject to tax. The taxable amount is the amount by which the discount exceeds 20 percent of the price to the general public.

Go to fairtax.org to get answers to most of your questions. It is the most thoroughly researchedand documented alternative to our current income tax system.

What a load of horse shitwritten by Jonny Texas , August 04, 2011

"Americans who produce goods and earn wages must pay significant tax and compliance costs under the current federal income tax. These taxes and costs both reduce after-tax wages and profits and are then passed on to the consumers of those goods and services in the form of price increases. When the FairTax removes income, capital gains, payroll, estate and gift taxes, the pre-FairTax prices of these goods and services will fall. The removal of these hidden taxes may also allow wages to rise. Exactly how much prices will fall and wages will rise depends on market forces. For example, in a profession with many jobs and too few to fill them, wages will likely increase more than in fields where there are too many employees and not enough jobs."

You cannot have both a fall in prices and a rise in wages. The problem is that the payroll tax burden is transferred to the employee through withholding. If the company maintains the wages of the employee the only savings that they are going to have is in the income taxes the business itself pays. To maintain the current end price of the product the employer would have to recapture the amount that was payed by the employee. To do that the wages would have to be reduced to the previous level of take home. If you made $10 an hour and took home $7. Your new pay would have to be reduced to $7 an hour for the tax revenue stream to be captured. If you are salaried the same would have to happen.

You cannot have your cake and eat it too.

The system is still going to retain the same level of small business corruption and evasion that currently runs rampant in the system.

"Assume that Joe owns a flower shop business and buys a van to use when making deliveries to his customers. No tax is charged on purchases for business purposes so that the FairTax on goods sold to consumers does not double tax, or put a tax on a tax."

Anyone acting as an independent contractor can see enough holes in this position to drive a truck through.

"The term “employee discount” means an employer’s offer of taxable property or services for sale to its employees or their families for less than the offer of such taxable property or services to the general public."

Since companies never pay tax they will make items available in leu of financial compensation. How many times is it going to take for a CEO to get a house at a 19.99% discount before the Reichtag gets burned?

When it comes to compliance costs you are just trading one set of for another with the scheme of id and invoice tracking.

This is a crackpot scheme right up there with keynesian economics. Theoretical mumbo-jumbo that has never seen the light of day. Even in the theoretical stages before the appearance of any unintended consequences there are loopholes, conditions, and schemes.

Flat tax = (Revenue x tax rate) - (dependent exemption x dependents). A below average fourth grader with a calculator can figure out the rate in all circumstances even with exemptions.

Not to mention that using the largest economy in the world as your testbed is truly insane.

...written by TomC , August 04, 2011

The bread scenario is interesting and very real.

A. What is my hourly wage? $10 per hour. B. What is my take home? $400, less any state income tax C. What is the price of bread to the supermarket? The current price less the costs involved with taxes (employee payroll--employer half, accounting, income, etc.) D. Does the bakery collect tax from the supermarket? No E. Does the bakery pay tax on the flower it buys? No F. If a loaf falls on the floor when I pull it out of the oven how are adjustments made? No

The only adjustments would have to do with what you and the employer decide to do with the employer portion of the payroll taxes. It is a cost of employment that, like all costs, are built into the end-product. Bakery is highly competitive, so the price of the bread will ultimately reflect the costs. Lower payroll costs will show in the bread, so I would guess that the price the bread is sold for wouldbe unchanged. As such, the $1 would show on the receipt as $.77, with $.23 for tax.

...written by Jonny Texas , August 04, 2011

The cost could be reduced by the amount of tax paid on the profits by the company as they are not taxed under fairtax.

The payroll is the bad part. If the pay rate remains unchanged then there is less of a reduction is costs (price rise) by the bakery, but the worker would be able to pay the increased price. If the pay rate was reduced the price could come down to the the .77/.23 level. Assuming that the bakery didn't pocket the difference, ala the airlines with the FAA tax reduction.

Either way the consumer is going to have to pick up the tab for the taxes that used to be levied against businesses as their tax burden since has been reduced to 0. Business profits are not taxed (real politik ensures that this will NEVER happen), and even their capital purchases are not taxed since they can all be justified as business or business related expenses.

...written by TomC , August 04, 2011

How much cheating is there is the sales tax systems in place today? Some, I am sure. But how many do we hear about? Businesses are not created by entrepreneurs to fail due to tax fraud. What percentage of business revenues are larger retailers vs smaller ones? How many WalMarts will commit tax fraud? What small business owners are going to risk being one of the state's audit targets? How many small restaurants do not follow health rules? They are expensive to implement, but there is pride in small businesses to stay vital.

With our complicated tax law and even with a simple flat tax there is an order of magnitude in numbers of payers to cheat. What happens with death taxes and capital gains taxes? How and at what rate are they paid? These taxes go away with the FairTax. What about millions in the drug trades and other street trades? Those people would be paying the FairTax with whatever they buy. What do they pay now? Waiter & Waitresses ... What portion of their tips are they paying income taxes on? The would be paying the FairTax.

You are looking for fraud in under a FairTax system, and I agree there would be some. There always is. I contend there would be much less than under any income tax environment where we have the government monitoring every facet of our lives trying to glean every spec of information that may be income related. Under the FairTax, there is no need to know of our bank transactions, our credit card activity, our tips, how we handle our wealth at death, what insurance we have or do not have, what investments we have held for more or less than a year, and on and on ...

Any income tax is horse shit. It is taking, by force, part of my life and livelihood. A consumption base tax, beyond the poverty line expenditures, is a choice based tax. A billionaire hermit can choose to not pay any taxes by living at or below the poverty line. Few would.

Imagine how silly an income tax would sound if our reality was this consumption based tax. What do you mean we will have to have our employer withhold some of my money to give to the government? What do you mean I will have to fill out forms every year and turned in on April 15th? What do you mean I have to tell the government where I invest my money and how much my investments pay off? What do you mean that the information requested annually will be so extensive that I will have to have an accountant fill out pages and pages of forms? What do you mean that I will be paying over 20-60% of what I earn to the government? That is what is horse shit. That is insane. The government could never develop the infrastructure todo such a thing. This system would be wrought with fraud.

...written by Jonny Texas , August 04, 2011

First, the common ground. We both agree the current system is fucked and fucked hard.

I like the way the Fairtax.org gives space to opposing viewpoints. That is something that is absolutely awesome. You need to listen to others ideas or you start listening to the voices in your head that tell you that you are always right.

That being said, the fairtax is still horse shit.

"What about millions in the drug trades and other street trades? Those people would be paying the FairTax with whatever they buy. What do they pay now? Waiter & Waitresses ... What portion of their tips are they paying income taxes on? The would be paying the FairTax."

Shift all of the fraud from small time cheats to big time cheats. Got ya

"With our complicated tax law and even with a simple flat tax there is an order of magnitude in numbers of payers to cheat."

What do your books show you made as revenue? You owe X%. This number does not match your 10K? your CEO, CFO, COO might be going to jail.

What does the company, investment house, broker (who could care less what you owe in taxes as long as it does not get into trouble) withhold? You want your (dependents x exemption) back just file your postcard return. If the number match you are cool. If not you need to answer some more questions. You could even stagger the filing dates according to SS# so the IRS would receive a steady flow of returns and could manage it's people better.

"What about millions in the drug trades and other street trades? Those people would be paying the FairTax with whatever they buy. What do they pay now?"

Nothing. Exactly the amount you would get from the new and improved black market.

"Waiter & Waitresses ... What portion of their tips are they paying income taxes on? The would be paying the FairTax. " Probably less than the amount that would be lost in "Employee discounts" of 19.99% under fairtax of services and goods provided in leu of compensation. If you screw somebody hard enough they will find ways around the bullshit. Look to history. How did we get employer provided health insurance? When you screw with compensation youare going to get unintended consequenses.

"Any income tax is horse shit. It is taking, by force, part of my life and livelihood. A consumption base tax, beyond the poverty line expenditures, is a choice based tax. A billionaire hermit can choose to not pay any taxes by living at or below the poverty line. Few would."

You are paying for the opportunities provided by the system that you live in. Could Warren Buffet amass as much capital in an agrarian society? No he benefited by the society around him that allowed him to be as successful as he was. So did Exxon mobile, Kraft, Ford, McDonald's, etc. They are contributing to the system in which they are thriving and without which they could not exist. How many multi-nationals emerge from the third world? How many from the developing world? They need the institutions that surround them to emerge. They are formed from the sweat of their creators and owners, I totally agree, and that is why they need to keep the large majority of what they earn. They do however need to supply the resources to the system that sustains them and made possible their very existence.

Now for my last point which you so artfully dodged.

"using the largest economy in the world as your testbed is truly insane."

Unintended consequences are a bitch.

weirdnesswritten by Jonny Texas , August 04, 2011

Just came to me. Investments.

How about a commodity that is also an investment?

Two 1 oz. bars of gold and you wish to purchase one of them. One is fresh from California, ah but it is "new gold" you need to pay 28% tax. The other is from Cash for Gold, it is tax free.

Which has more value?

You are not buying them for consumer purposes, but as an investment. Do you owe tax?

Trick question! A business buys them to speculate on the price and since it is a business, it has been bought as a business related expanse and is not taxed no matter what.

Unintended consequences are a bitch.

ok...written by sanders , August 04, 2011

Nobody mentioned that Russia has a 18% consumption tax, no VAT, no income tax. That sounds very like the FairTax. If it is true, and working now, it would be the 'testbed' for the implementation.

Nobody, if you have more info on that it would be nice to see a link or two on how it works in the 'real world'...

JT, I like your version of the flat tax, but it still puts the IRS in our lives. The IRS as we know it will be abolished under the FairTax. They will be reduced to 5 or 10% of their current strength, and be only for the enforcement of the collections of the new tax.

Tom answered your example 1... Here is your example 2 with answers:

A. Do I collect tax from the wholesaler? No, only retail sales to the end user get taxed. B. Do I get a refund when the wholesaler sells it? No. A refund of what? C. Does the wholesaler collect it from the retailer? No, see A. D. If I use a trucking company to transport to the wholesaler does the trucking company charge me the tax? Yes. That is a service to the end user (you are an end user to the trucking company).

Think about how well this country did in becoming a world power before the income tax was implemented in the early 1900s. We didn't HAVE any income taxes before 1913 (at least not any permanent income tax). The current tax system, all 80,000 pages of it, have been implemented in the last 100 years.

Again, it is the elimination of the IRS as we know it... Some other questions you had:

1. Cut all of the rebate, prebate, refund checks? The Feds are good at cutting checks. We cut millions of checks a month for various things. This would be one more, and could be handled like the new SNAP program, as a Debit card program. 2. Make, monitor, and enforce the rules? Make is congress, as it is now. Monitor and enforce is the 'new, reduced' IRS. 3. Conduct auditing? Again, the 'new, reduced' IRS.

The IRS will be around, but they will only be handling the 15 to 20 million businesses that sell retail to the end user, instead of the 170 Million returns (from individuals and companies) that they handle now.

...written by TomC , August 05, 2011

JT, you mentioned the FAA tax elimination (for a couple weeks) not being reflected in ticket prices as an example of prices not adjusting for costs. Inappropriate example. There is hysteresis in market reaction. The bread scenario was a more relevant example because there is lots of competition in a very dynamic market. If costs fall 20%, bread prices are driven down 20%. Vendors adjust or are driven out of the marketplace. Simple supply and demand. If the price was truly eliminated, there would be an adjustment in the costs and pricing.

Commoditieswritten by TomC , August 05, 2011

About the gold example. California Gold Diggers, Inc. digs the gold out of the ground, melts it into 1 oz bars, add the Fairtax and sells it at the current price of gold? What are you questioning? This is a newly formed bar that is sold to an investor and included the FairTax.

...written by Jonny Texas , August 05, 2011

Sanders and TomC I just want you guys to know I am really enjoying this. We are having a spirited debate and nobody is calling anybody names. On that point I regret and apologize for the "horse shit" comment. It interjected a tone to the debate that I really don't want here in this discussion.

"Nobody mentioned that Russia has a 18% consumption tax, no VAT, no income tax. That sounds very like the FairTax. If it is true, and working now, it would be the 'testbed' for the implementation."

Flat tax. Not Fairtax. It is quite popular in the old eastern bloc. While none of these systems (or all of them combined for that matter) approaches the size or complexity of the US economy, they are suitable as laboratories for the system to figure out some of the things that work and the things that don't work. Applying a new and completely untested system to the US would be reckless.

"D. If I use a trucking company to transport to the wholesaler does the trucking company charge me the tax? Yes. That is a service to the end user (you are an end user to the trucking company)."

This kills the private trucking industry. A 97.9 billion dollar industry ceases to be. Any company that can possibly afford to has to operate it's own fleet. Even if they do it 20% less efficiently they will as it will save them money. If you are a small business and you cannot raise the capital to operate your own truck(s) you are going to be at a distinct disadvantage vs. someone who can.

And since we are talking about outsourcing (trucking being an outsourcing of transportation) or consulting (outsourcing of expert assistance) think of all the other outsourcing that will die? Janitorial, HR, Tech services, Logistical services, Engineering, etc. would all suffer the same fate. How many people on this board would be out of a job or forced into working for a company?

"About the gold example. California Gold Diggers, Inc. digs the gold out of the ground, melts it into 1 oz bars, add the Fairtax and sells it at the current price of gold? What are you questioning? This is a newly formed bar that is sold to an investor and included the FairTax."

Think of the pricing issues, "old gold" is worth more than "new gold". Commodity items of the same quality that are worth dramatically different prices will have severe market distortions. Producers of "new" commodity items will be at a severe disadvantage to recyclers of "old" commodity items. Any investment in an old commodity item will be worth more the day after the fair tax is implemented.

More weirdness:

JT's Cars LLC buys used cars. I fix them up and resell them at a profit. The cars are "old" but the labor to fix them up and the replacement parts are "new". How do I tax this?

My entire resistance to the Fairtax is in it's vagueness and the amount of questionable situations that are involved. The old/new part (critical to the system) just offers too much wiggle room for shenanigans. And there will be significant shenanigans as entire business models will face severe disruptions or outright extinction. As Sanders correctly stated congress will be in the position to make the rules and companies will have significantly more money to throw at them since they pay no taxes and have lowered compliance costs. Give the congress a year of Fairtax and the old/new rules are as corrupted and twisted as the interstate commerce clause.

JT Sander et alwritten by Nobody , August 05, 2011

The flat tax in Russia is, according to my Russian neighbor, a "transaction tax". It takes place at both the wholesale and retail level. New, used, private. I'll try to do some more research. It is popular in the old eastern block.

Wikiwritten by Nobody , August 05, 2011

So the Russian system is getting just as screwed as ours;

http://en.wikipedia.org/wiki/Russian_Tax_Code

I know it's Wiki but...

Ah, well...written by sanders , August 05, 2011

It looks like the Russian model is a VAT, something the FairTax isn't.

JT, I agree. A lively discussion like this is very enjoyable. And don't worry about the 'horse shit' comment. It was directed at an idea, not a person. No harm, no foul.

Don't have time to respond as fully as I'd like. The bride and I are getting packed up to hit the road to Cherry Capital (Traverse City), Michigan. (mom in law). Hope this is still going tomorrow afternoon.

Happy Friday, All.

Yeah Jonny,written by Nobody , August 05, 2011

This happens every once and a while. Traverse City rawks!!

JTwritten by sanders , August 06, 2011

The Russian model is not a flat tax or a fairtax... it is a consumption tax, and it sounds more like a VAT than anything else. It isn't on income, or only on retail sales.

"This kills the private trucking industry". Why would that happen? The prices would change very little if at all. Remember, we are replacing the embedded taxes that we don't see now, with the FairTax that we do see. The trucking company will still be making the margins that it does now by charging $77 for each $100 that it used to, and then adding the $23 to it to get to the same price.

I am not sure about the gold example that you asked about... I would definitely have to defer to someone who is more knowledgeable about it than me. I'll try to do some reading in the bill and see if there is anything specific mentioned.

I haven't seen a response from you about the current black market being brought into the tax base. Drug money, illegal alien 'income', even the cigarette dealers in NY that you mentioned... All these would now be paying taxes on everything that they buy, which in most cases now they don't. Not to mention the tourists that come in to the country.

...written by Jonny Texas , August 06, 2011

The Russian system started out as a flat tax and then the Russians learned how to do more western politics and screwed it all up.

Private trucking will have to add to the margin. The Fairtax only releases the company from the tax on their profits. They can only drop the price by that much unless they reduce their labor costs by the amount that was previously withholding. Companies operating their own fleets wouldn't have to pay the 28%.

Try it like this, if you are right independent companies will be able to keep prices at current levels including the 23% tax ($77+$23=$100), while companies operating their own transportation will be able to operate at a 23% discount ($77) since they won't be paying the tax for services that they provide to themselves. Hell, they will kill the trucking companies even if they are 20% less efficient since it isn't their core competency(77*1.2 = 94.2). It will be like this for every outsourced operation.

"I haven't seen a response from you about the current black market being brought into the tax base. Drug money, illegal alien 'income', even the cigarette dealers in NY that you mentioned... All these would now be paying taxes on everything that they buy, which in most cases now they don't. Not to mention the tourists that come in to the country."

You are simply going to trade one black market for another. For every dollar you make from a drug dealer (usually less than minimum wage) you are going to lose a dollar from the new black market. For every dollar you get from a person that was cheating on their taxes by fudging the numbers on the old system will fudge on the new system as well. Every dollar you get from a tourist here you'll lose from a tourist going overseas. Hell think how good of a deal international travel would become for Americans.

How much would you lose from citizens investing and making money in country and maintaining a residence outside the country? Forget retiring in Boca, I would go to Belize and live like a king in one of the new expat communities that would erupt all over the place when I retire. I could pull off my retirement accounts and my pension all tax free and not pay a dime in Fairtax.

Historicalywritten by Nobody , August 07, 2011

About all you can squeze of of people is about 20% of GDP. I may be human nature. (the 20% rate is mentioned in Genisis.) When Ike had the top rate at over 90%, he still got only 20% in GDP. RWR lowered the top rate to 28% and collected, wait for it, 19%. So I'm thinking wheather it's the King or DC, 20% is what your going to get.

Beyond that you get black markets and the serfs voting with thier feet.

JTwritten by sanders , August 09, 2011

Hope you're still watching this... Traverse City has been fun. Heading home tomorrow, nice easy drive over Lake Michigan. Good scenery.

Anyway, as for the trucking company, the 23% embedded taxes is in the final price, so the prices won't change. A company that uses trucking now would have to purchase the trucks, hire the drivers, maintain the trucks, buy the gas/diesel... That's just the beginning. I think the headache and extra time involved would keep the independent trucking companies in business.

You can only squeeze 20% income tax from people. That doesn't include the gas tax, property tax, tobacco tax, liquor tax, property tax, state income tax, state sales tax, &c, &c, &c...

Black market and tax evasion? You are still talking 20 million v. 170 million returns... One of the things that helps is that 80 to 85% of the retail sales are from larger corporations that aren't going to risk the penalties.

Becoming an expat? Going to move to Europe? Greece maybe? Enjoy the VAT, which is 15% at every level of the process... Or how about the Caribbean? Everything for daily living is imported, and costs more than it does here. Going to fly the family in once or twice a year? Or fly home once or twice a year? There goes any supposed savings.

Anyway, hope you all have had a good few days...

...written by Jonny Texas , August 13, 2011

No problem. I had family in town and wasn't able to post anyway.

"Anyway, as for the trucking company, the 23% embedded taxes is in the final price, so the prices won't change." Ths shipper was the final customer of the service. They will either have to incorporate it into their price (meaning that it gets taxed twice) or the retailer needs to know the shipping costs so that they cannot apply the tax to the costs that have already been taxed. Simple right?

"A company that uses trucking now would have to purchase the trucks, hire the drivers, maintain the trucks, buy the gas/diesel... That's just the beginning. I think the headache and extra time involved would keep the independent trucking companies in business."

Nah, anybody with any business sense would wait until the trucking companies became distressed and buy the companies to capture the value stream. Once again even if they fuck it up and are less efficient than the original operator they still make a killing on the investment. It is like that for every indie contractor.

"Black market and tax evasion? You are still talking 20 million v. 170 million returns... One of the things that helps is that 80 to 85% of the retail sales are from larger corporations that aren't going to risk the penalties."

Old inefficiencies are replaced by new ones. old loopholes are replaced by new ones. And non monetary compensation will flourish for everyone making decent money. working around government regulation is where employer provided heath insurance and retirement schemes came from. What new weirdness would this create? Who knows? This has never moved off of the drawing board.

"Becoming an expat? Going to move to Europe? Greece maybe? Enjoy the VAT, which is 15% at every level of the process... Or how about the Caribbean? Everything for daily living is imported, and costs more than it does here. Going to fly the family in once or twice a year? Or fly home once or twice a year? There goes any supposed savings."

Just google "expat ....." (I would put my own links but the system will not let me post too many links)

Expat communities are huge right now, what makes you think they wouldn't be even more so once you incentivize them with all American based income being tax free?

What makes you think they wouldn't be incentivized by the expat countries once the market expanded even more?

How many people can work with nothing more than an internet connection? Between my wife's two jobs doing just that, my pension, and working from a laptop writing manuals and training courses. I could be earning 11+ times the per capita income of Belize (one of the most prosperous countries in central America) income tax free so it would even end up more than that.

I promise that I would keep posting from my beach.

...written by sanders , August 14, 2011

Hope you had fun with the family. My Daughter and (future) son-in-law were in town too.

Good point on the trucking. I did some reading on HR25 while I had a chance. Some things I didn't even remember... The trucking of the goods would not be taxed, as they are used for a business purpose: "No tax shall be imposed under section 101 on any taxable property or service purchased for a business purpose in a trade or business."

The one I found that I didn't remember was there had to do with the gold example from earlier: "No tax shall be imposed under section 101 on any taxable property or service purchased for an investment purpose and held exclusively for an investment purpose." So, unless your gold is for other than investments, it isn't taxed.

Your expat points are good. I'm wondering how many more people would move out of country, away from friends and family, to escape prices that haven't changed appreciably. That is the entire intent about the FairTax, prices to the consumer won't change more than a percent or two. When you figure in the 'prebate' (which you would not get as an expat), prices would actually go down... The extra income in a lower cost country may be a tipping point for some, but maybe not as many as you are thinking?

Looks like a great day out. Enjoy the Sunday!

Black Marketwritten by sanders , August 14, 2011

There will always be a black/gray market. But I still put to you that the numbers will go down. The guy selling smokes out of the back of a truck isn't avoiding the sales tax as much as he is avoiding the sin tax. That isn't going away with the FairTax. But when the guy selling the smokes buys his dinner, groceries, car, and gasoline, he's paying the tax anyway...

As far as barter, that's always been around, and tax avoided as much as possible. "Doc, did you know that chicken you got for the house call to the Jones's was supposed to be taxed?"

...written by Jonny Texas , August 15, 2011

OK, so shipping not taxed. Makes more sense that way.

How is the I am an indie contractor and "I bought it for resale, but just never got around to it. Now I have kept it too long and I am going to write it off as unsellable." going to be handled? For instance. My wife is an indie contractor. She buys a computer for work and it is not taxed. Not a problem. But she buys a television and says she is looking into expanding the business to reselling TVs. We use it for 8 years while she is "looking for a buyer". It gets out of date and we trash it as unsellable.

The gold example opens a huge loophole. Jewelry or anything else that could possibly be considered an investment is virtually untaxable.

"I'm wondering how many more people would move out of country, away from friends and family, to escape prices that haven't changed appreciably."

Going back to my indie contractor thing. If for the sake of argument the prices haven't changed (only if business is capturing the benefit of the withholding and fully passing it along), but if you are an indie your net income has become your gross income since you are no longer paying taxes. Your income will return to previous levels if you stay.

"There will always be a black/gray market" We agree on this one. I just believe that it will stay the same or get worse as the unimaginative small fries start paying, and anyone with at least a little business acumen or the ability to pay an accountant with some pays nothing or next to nothing using business loopholes.

In summary (because this is becoming just too long):

Business that use and benefit from government services (legal system, etc.) pay nothing for their upkeep.

Compliance costs for most businesses will drop under the system.

The loopholes in the system are no smaller than they are now.

The system is just as open to political hanky-panky as the current system.

The large central IRS bureaucracy is traded for larger state tax enforcement bureaucracies.

The system has never been outside the lab and the unintended consequences of releasing it on even a small economy are totally unknown much less those on the largest and most complicated one.

...written by TomC , August 15, 2011

This is bordering on the ridiculous. These situations might exist, but how often do you hear of a state government not collecting its sales tax? The states would still be responsible for the collection, just like now.

As to businesses trying to skirt the tax, there would be some of that, but people want to keep and grow their businesses and they cannot do that from jail. There would be many fewer entities to monitor for taxes than currently with the IRS. Random audits would still be in order.

States keep a percentage of the take. There is incentive to collect it. States collect and have collected their sales taxes. There is a historical gauge to measure compliance.

These are not insignificant problems, but there will be 50 different collection entities/states which will develop the best means of collection.

Think about the scenario I posed earlier where the Fairtax is the law of the land and there is a proposal for our current system of income, payroll, death/estate, and capital gains taxes to replace it. How much easier would it be to find holes in it than in the FairTax? How would that proposal of massively more federal government power be received?

...written by Jonny Texas , August 15, 2011

"The system has never been outside the lab and the unintended consequences of releasing it on even a small economy are totally unknown much less those on the largest and most complicated one."

Try it in some backwater for 15 years and then come talk to me.

...written by sanders , August 16, 2011

There may be some unintended consequences, but even with those, you have to see that it's gotta be better than the 70,000 pages of tax law we have now. One of the reasons that we have the 'most complicated' one is the 70K pages of tax law... Pulling it down to 100 pages or so has GOT to be better for enforcement, compliance, and revenue. TomC and I could keep answering your scenarios that you bring up, but in the end, you have to look at it and decide if the possibilities for ease of use and simplicity are worth the possibilities of 'gaming the system'. I believe they are. You may not.

I also don't think we have 15 years or so to play in the backwater. Our tax system is going to turn us into another Greece or Italy before then, since our pols can't seem to get their thumbs out of their backsides long enough to keep the feces from hitting the rotating air flow redirector. I worry about my kids having the same advantages that I had from the (relative) liberty standpoint, and I don't see that happening without some major reform. Your (JT) idea about the flat tax is a possibility, I just think that the FairTax is a better alternative.

Anyway, I agree with Tom that we have probably beat this horse into the ground. We may have to respectfully agree to disagree; and I do respect your opinions, JT.

See you in the funny papers!

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